Wednesday, October 31, 2012

MANILA, Philippines - Listed Coal Asia Holdings Inc. has approved the proposal to engage an independent firm accredited by the Philippine Stock Exchange (PSE) to revaluate the resources of its mining subsidiary Titan Mining and Energy Corp. (TMEC).The revaluation is part of the requirements of the PSE in connection to the initial public offering of the shares of the company.“Based on the results of the revaluation, the corporation shall conduct a study on options to enhance stockholders benefits. The enhancement in the corporation’s assets will allow it to have retained earnings, and will result to a possible buy-back program depending on a surplus situation,” Coal Asia said in a filing.TMEC, a wholly owned subsidiary of Coal Asia, owns mining exploration and development rights in some 13,000 hectares in Davao and Zamboanga-Sibugay.Net proceeds from the offering, amounting to P726.87 million, will be used to bring the Davao Oriental mine into production by 2014 and the Zamboanga Sibugay mine by 2015.Coal Asia needs $80 million over the next three to four years for the development of the two mines with potential coal resources of 120 million metric tons.The company expects to produce an initial 600,000 metric tons of high-grade coal beginning 2014. It expects to earn P500 million in profit in the first year of the operations of the mine.Last year, Coal Asia reported a net income of P4.91 million, more than double the P2.03 million reported in 2010 because of a 63 percent jump in sales to P21.84 million. source

MANILA, Philippines - Manila Electric Co. (Meralco), which is pursuing power generation projects in the Philippines, is also keen on putting up power plants in Vietnam, one of the emerging markets in Southeast Asia.The country’s largest power distributor is looking at 150 to 600-megawatt (MW) power plants in Vietnam through joint venture deals, the company’s top official said.“They have several projects that are on the [back] burner so we said that we would be interested in looking at the opportunities there,” said Meralco chairman Manuel V. Pangilinan.“The size of the projects range anywhere from a minimum of 150 MW to about 600 MW,” he said.Executives of regional conglomerate First Pacific Co. Ltd., the Hong Kong-based parent firm of Meralco, conducted a three-day business mission to Vietnam two weeks ago.First Pacific noted that Vietnam’s growth prospects, demographics and increasing urbanization create a favorable environment for investments in water distribution, mining, hospital, energy, infrastructure, media, food and agribusiness.“We will probably take modest steps first in Vietnam. Of course the numbers have got to work for us,” Pangilinan said.To date, Meralco, through subsidiary Meralco PowerGen Corp., is looking at generating 2,700 MW of electricity in the Philippines from now until 2020.Pangilinan said the potential business arrangements in Vietnam are reasonable.“The advantage of this is that there is an offtake arrangement that may be possible under their regulatory regime,” Pangilinan said.Pangilinan said the power generated can be bought by government through state-run Vietnam Electricity.Vietnam, like the Philippines, is an emerging market in Southeast Asia that continues to record robust economic growth amid woes in the euro zone and the US.Executives of First Pacific earlier said the conglomerate is open to taking minority stakes in businesses in Vietnam, a deviation from its normal tack of taking control of businesses it wants to acquire.“We will take a minority, a significant minority,” Pangilinan said, adding that it will partner with private firms in that country.“We do not have first-hand experience of how business operates in Vietnam, especially the regulatory aspects of it so it is better to take certain baby steps,” he added. In the Philippines, Meralco has set an an aggressive target of building two 600-MW coal-fired power plants worth up to $2.6 billion and four 375-MW liquefied natural gas power plants through joint ventures.This will ensure reliable and more affordable power supply to Meralco’s customers.Meralco is indirectly controlled by First Pacific and partly owned by San Miguel Corp. In the Philippines, First Pacific is the controlling shareholder of telecommunications giant Philippine Long Distance Telephone Co., infrastructure holding firm Metro Pacific Investments Corp. and Philex Mining Corp.Meanwhile, First Pacific unit Philex Petroleum Corp. is interested to look at more gas fields in Vietnam.“They seem to have gas fields in Vietnam. Maybe they have an indigenous source of gas as well,” Pangilinan said.To date, Philex Petroleum holds a 27-percent stake in British firm Pitkin Petroleum Plc that has an exploration activity in Vietnam. source

Tuesday, October 30, 2012

Business Mirror

Published on Tuesday, 30 October 2012 20:32

Written by Manuel T. Cayon / Mindanao Bureau Chief

DAVAO CITY—Mindanao faces significant energy shortage when the El Niño dry spell heats up the region in the first six months of next year.

The Mindanao Development Authority (MinDA) said on Tuesday that Mindanao is currently suffering from a daily average deficit of 300 to 400 megawatts during peak periods. The Mindanao grid is capable of generating 800 MW or thereabouts.

The deficit level was more than double the figure that was announced two weeks earlier. Milfrance Capulong, corporate affairs officer for Mindanao of the National Grid Corp. of the Philippines, said then that Mindanao was reeling from a deficit of 120 MW.

Its doubling arose from full decommissioning for repair of the three turbines of the 210-MW Steag coal plant in Cagayan de Oro City in Misamis Oriental. This capacity would be considered huge for a grid that could only churn out 974 MW combined from government and private facilities.

At peak periods, demand would reach 1,100 MW, Capulong said.

At the current deficit level, some areas of Mindanao have been experiencing at least two-hour brownouts and six-hour ones in others.

Romeo Montenegro, MinDA director for investment promotion and public affairs, said the Steag plant would be restored by the second week of this month. Restoration could lead to recovery of the 200 MW that had been lost.

According to Montenegro, the remaining shortage of as much as 200 MW would continue to hound the region for the rest of the year. This shortage, he said, could develop into a crisis once El Niño reduces water levels across Mindanao by the summer of 2013. The Mindanao grid relies for 53 percent of its capacity on hydroelectric power plants that tap the waters of the Agus River of Lanao del Norte and Lanao del Sur and the Pulangui River of Bukidnon.

The Mindanao Power Monitoring Committee (MPMC) plans to tap again internal-generation capacities of corporations that are using their own generators, and offer them incentives for turning these generators on during peak periods.

The MPMC is a special body created this year to address the festering power shortage in the region.

Montenegro said the combined embedded capacities of these corporations might reach 300 MW, which could help the Mindanao grid disperse this capacity to other areas needing them.

He added that quick rehabilitation of the Pulangui IV hydroelectric power plant and the Iligan diesel-power plant (IDPP) could generate additional capacities. The Pulangui plant, however, was only recently repaired and the IDPP was said to have been hounded by a government audit. source

Business Mirror Published on Tuesday, 30 October 2012 19:45

Written by Paul Anthony A. Isla / Reporter

UNCHARTED waters are making the group of businessman Manuel Pangilinan opt to take small steps as it bids to enter the Vietnam power industry.

Pangilinan in an interview told reporters that they would take modest steps in Vietnam and that they would initially take a significant minority in possible ties with Vietnam-based private power enterprises.

In explaining why they are taking a different approach in Vietnam, Pangilinan said the group does not have first-hand experience on how to operate businesses in Vietnam, particularly in the regulatory aspect.

“So it’s better to take certain baby steps first,” said Pangilinan, adding that he could not ascertain how long they would make these small steps.

He added that the numbers also got to work for them, and that they have not got any clue to what numbers will work as of the moment.

Pangilinan said most of the companies in Vietnam are involved in the power-generation sector, which already have projects in the pipeline.These power projects range from a minimum of 150 megawatts (MW) to about 600 MW.

Pangilinan said these arrangements seem to be reasonable, because the power output is bought by the government, through state-controlled EVN (Vietnam Electricity).

The businessman said the group may also take a look at the oil and gas industry in Vietnam. “They seem to have gas fields in Vietnam. They might even have indigenous sources of gas as well,” he said.

Metro Pacific Investment Corp. (MPIC) is already developing an oil field in Vietnam through Pitkin, which is 27-percent owned by subsidiary Philex Petroleum Corp.

Pangilinan and his group recently met with the Philippine Business Group Vietnam (PBGV), in a forum co-organized by First Pacific Investment Corp. In their three-day business trip, Pangilinan and his group discussed with PBGV potential business ventures in that country.

In January this year, Beacon increased its stake in Meralco to 48.02 percent from 45.36 percent when it acquired a 2.66-percent stake from the Lopezes. The sale to Beacon further diluted the Lopez family’s interest in Meralco to 3.9 percent. source

KIDAPAWAN CITY (MindaNews/30 October) – Aboitiz-owned Therma South Inc. (TSI) entered into an agreement last week with a sister company, the Davao Light and Power Company (DLPC) that seeks to stabilize power supply in Davao City and surrounding areas, an official said.

The deal, signed on October 25, aims to secure power supply in Davao City and surroundings provinces in the medium term, said Wilfredo Rodolfo, branding and communications manager for Mindanao of the Aboitiz Power.

TSI, a subsidiary of Aboitiz Power Corp., will manage the 300-MW coal-fired power plant in Davao City. Its construction will be completed in June 2015, Rodolfo said.

Under the agreement, he explained, the DLPC will receive 100-MW or 33.33 percent of the total capacity of the coal plant.

With the latest deal, he said smaller electric distributors, including Cotabato Electric Cooperative (Cotelco) in North Cotabato, will no longer need a minimum capacity required before the power barges of the Therma Marine, Inc. (TMI), another subsidiary of the Aboitiz Power in Davao Oriental, could run.

“For a smaller cooperative like Cotelco, the deal is very important. For example, before Cotelco could purchase power from the TMI, they need to have at least 45 MW of requests from other co-ops in order for the engines to start,” Rodolfo stressed.

He said the TMI could not just run their power barges based on Cotelco’s recent purchase agreement.

Since June, Cotelco has been buying at least eight MW from TMI.

“Cotelco has to call other cooperatives so that in total, their demand will hit 45 MW,” Rodolfo said.

What makes it more significant, he said, is the impact on rates as Cotelco can choose their source of power anytime.

The power deal was signed by DLPC executive vice-president and chief operating officer, Arturo M. Milan, and Aboitiz Power Corp. vice-president for sales and marketing Roland Gaerlan in Davao City. (Malu Cadelina Manar/MindaNews) source

The power generation subsidiary of Manila Electric Company (Meralco) is lining up $2.5 billion worth of investments to put on stream at least two coal-fired power projects of 600-megawatt capacity that may help meet its long-term electricity requirements.

Meralco President Oscar S. Reyes has noted that a coal-fired plant of that scale may cost $1.2 billion to $1.3 billion; and the total for the two facilities may reach $2.5 billion.

“That will be total project cost, $2.5 billion. The cost of building a coal plant would range from $2.0-$2.5 million per megawatt,” he explained.

That investment line-up already includes Meralco PowerGen’s coal-fired plant in Subic which is currently awaiting the issuance of its environmental compliance certificate (ECC) for the second 300MW unit.

The two coal-fired plants, he added, will account for less than half of their planned 2,700 megawatts of total capacity developments until 2021.

The coal-fed generation plant will be in the priority project development plan of Meralco PowerGen because this will address its parent utility firm’s requirements for baseload capacity.

The next round of capital outlay for projects will center on its aspiration to integrate liquefied natural gas (LNG) facilities into its power mix.

The company has signed deals for parallel studies with at least two proponents: Shell Philippines and Japanese firm Chubu Electric.

The choice of eventual partner for the venture, Reyes said, “will be driven by which (proponent) is more robust and which is more competitive.”

He indicated that their proposed LNG facility should have a total installed capacity of 1,500 megawatts so it will thrive economically viable, and the resulting electricity rates to consumers will be affordable.

“It will be four blocks of 375MW each unit,” he said; noting that every phase of project development could be at a capacity of 750MW.

The costs for the planned LNG facilities are still being re-evaluated by the company. Primordial concern being weighed on this technology option would be the gas supply as well as the underpinning infrastructure, such as the re-gas terminals.

Reyes noted they may just choose one partner for LNG development; or they can have two but the timing of implementation will be one after the other.

Shell and Chubu Electric are currently working on feasibility studies that will evaluate the viability of LNG facilities for Luzon grid’s power supply. (MMV) source

Despite the damage that were caused by several weather disturbances, publicly-listed Manila Electric Co. (Meralco) still managed to post a nine-month consolidated net income amounting to 13.6 billion.

In a disclosure to Philippine Stock Exchange, Meralco announced that its inaudited consolidated core net income, which excludes one-time, exceptional charges for the nine months ending September 30, 2012, amounted to P12.9 billion, while its consolidated reported net income amounted to P13.6 billion.

“Power consumption continues to be a barometer of the health of the economy. The rise in our energy sales volume reflects a resilient economy supported by stronger domestic consumption and higher government infrastructure spending. We continue to be optimistic about our business, having seen the better-the-expected results and are committed to implement capital expenditures, estimated to be in excess of P11 billion to further improve our network reliability,” Meralco Chairman Manny Pangilinan said.

The disclosure added that volume energy sold during the first nine months of 2012 reflected an 8-percent growth despite the number of severe weather disturbances and holidays during the period.

“There was an estimated 73 gigawatt hour of unserved energy attributed to the forced outages due to the Southwest Monsoon Habagat [triggered by Tropical Storm Haiku] and to Typhoon Gener and an additional 6 GWh reduction because of the two holidays in August,” the company said in the disclosure.

Also, Meralco’s billed customers grew to 5.2 million, a total of over 130 thousand new customer accounts, while its core earnings per share for the nine months was P11.438, and reported earnings per share, P12.10.

“Our network, customer service and support facilities are ready for the expected increase in customer count and load growth as GDP [gross domestic product] continues to grow at the estimated rate of 5 percent. Meralco will continue to be the country’s partner in development. Our share in the total bill is only 16 percent,” Pangilinan said.

He also said that in terms of the generation charge, which accounts for 58 percent of the average bill, Meralco successfully managed to close new long-term Power Sales Agreement (PSA) of 2,880 megawatts.

“These PSAs will result purchased power costs lower than those of the existing long-term and Transition Supply Contracts. This will contribute to containing the generation charge component of power prices, which is foremost among Meralco’s compelling commitment to public interest,” he added. source

The board of Coal Asia Holdings Inc. on Monday approved the proposal to tap an independent firm accredited by the Philippine Stock Exchange to conduct a revaluation of the resources of wholly-owned subsidiary Titan Mining and Energy Corp.

Coal Asia said the valuation made by Multinational Investment Bancorporation was based on the data available in March 2012 on Titan’s mining resources.

“The revaluation, which is part of the requirements of the PSE in connection to the initial public offering of the shares of the corporation, will include additional data yielded by drilling activities to date,” it said. source

MANILA, Philippines - Manila Electric Co. (Meralco) has again upgraded its projected profit for the entire year, which is now expected to reach P16 billion, due to strong sales.The country’s largest power distributor also increased its long-term generation capacity target to 2,700 megawatts (MW) from 2,500 MW.“Given Meralco’s performance to-date and the outlook for the rest of the year, we wish to advise our upgraded 2012 guidance for core earnings of P16 billion,” said Meralco chairman Manuel V. Pangilinan.“We are trending towards P1 billion to P1.1 billion in core income per month at the moment so we are upgrading [the guidance],” Pangilinan said in a briefing.In July, Meralco increased its projected full-year profit to P15.5 billion from P15 billion announced in April. Last year, the company recorded P14.9 billion in core earnings.Core net income, which strips out currency and derivatives-related items, jumped 11 percent to P12.9 billion in the nine-month period from P11.9 billion last year.Consolidated net income surged 37 percent to P13.6 billion from P10 billion last year. This reflected Meralco’s P759-million gain after selling its shares in upscale property developer Rockwell Land Corp.Meralco CEO Oscar Reyes said consolidated sales in January to September rose 7.6 percent to 24,448 gigawatt-hours (gwh) from a year ago.Industrial sales climbed 12.9 percent, commercial rose 5.7 percent and residential was up 5.1 percent.Meralco said sales were driven by “the higher volume of electricity distributed as well as the higher average purchased power price during the period.”Consolidated customer accounts rose 3.5 percent to a record 5.16 million as of end-September as the company added 130,042 new customers from the start of the year.In the nine-month period, Meralco said it spent 5.9 billion for power-related projects like the installation of new substations that will decongest critical loads and improve network reliability.Meanwhile, Meralco, through subsidiary Meralco PowerGen Corp., is looking at generating 2,700 MW of electricity from now until 2020.“With healthy demand we are seeing, there is a concern in the supply-demand particularly over the next three years,” Reyes said.He said Meralco PowerGen is looking at liquefied natural gas (LNG) power plants given the government’s promotion of the fuel source.Last year, Meralco PowerGen said it targets a generation capacity of 1,500 MW, which was increased to 2,500 MW this year.Reyes said total investment for two coal-fired power plants is $2.5 billion to $2.6 billion.This includes the 600-MW coal-fired power plant in the Subic Bay Freeport Zone in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp.Reyes said the company wants to build four 375-MW LNG power plants.“Our intent in all of these is go on a joint venture with strategic partners,” Reyes said. source

Monday, October 29, 2012

DAVAO CITY -- Measures are being drawn up to augment Mindanao's power generation capacity in the wake of a prolonged dry spell that is expected to worsen during summer next year, said an official of the Mindanao Development Authority (Minda).

Minda head for media and public affairs Romeo Montenegro said Monday they are looking at three options to ease the looming power shortage after the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) has foreseen an El Nino to hit most parts of the country, including Mindanao.

The El Nino phenomenon will further pull down the available generating capacity of the island, which is dependent on hydropower. More than 50 percent of the power production on the island is generated from Agus and Pulangui Hydropower Plant Complex.

Montenegro said the Mindanao Power Monitoring Committee (MPMC), which is chaired by Minda, with Department of Energy (DOE) and all its adjunct agencies as members, will try to work on the short-term and long-term solutions to address the fluctuating energy situation in almost all areas in Mindanao.

"Short-term means addressing the energy shortage we have now, while long-term solution means looking at the power investments for Mindanao," he said.

As of Monday afternoon, the official said the deficit in power load averages 300 megawatts, which causes several areas in Mindanao to suffer from constant brownouts during peak hours of the day.

The shortfall is brought about by the reduced capacity of the Agus Pulangui Hydropower plant and the temporary shutdown of 200 megawatt (MW) coal-fired power plant operated by Steag State Power Inc. due to the ongoing preventive maintenance, which will be completed by next month.

With the power lack reaching 300 MW, only three areas in Mindanao are spared from the rotational brownouts -- the cities of Davao, Cagayan de Oro and Cotabato City. Other areas are suffering from six-hour rotational brownouts.

"During hours that we don't have brownouts, (only means) our fuel operated generators are working and that there is an incremental cost in the absence of hydro," he said.

He assured, however, that after the preventive maintenance, power deficiency is expected to get back at around 100 MW.

MPMC is also looking at three options in a bid to cushion the effect of the reduced water level in the onslaught of El Nino in order to prevent long hours of power outages next year.

On the supply side, some of the solutions being laid out by the MPMC are the reopening of the Iligan Diesel Power Plant, Interim Mindanao Electric Market (IMEM), and Interruptible Load Program (ILP).

The Iligan plant can run about 100 MW. The power supply is expected to be delivered before May of 2013.

The IMEM will tap the embedded generators of the companies and industries, which will be auctioned to the market and be made readily available to the electric cooperatives.

Montenegro said the possible power, which can be generated through IMEM, will reach up to 200 to 300 MW.

With the ILP scheme, meanwhile, companies and industries will utilize their embedded generators and will disconnect from the grid in order to lessen the power demand of Mindanao.

Montenegro said they are doing all they can to prevent the same situation in 2010, wherein Mindanao suffered from long brownouts, as Agus-Pulagui Hydroplant was only able to supply 10 percent of their capacity.

He also encouraged investors to pour in capital for renewable energy resources like wind, biomass, and solar since relying more on fuel and diesel will spell an increase in the pricing of energy. (Sun.Star Davao/Sunnex) source

Environmentalists and investors are again at loggerheads over two proposed coal-fired power plants in Palawan, the last frontier for conservationists. The conflict though is not exclusive to that island. It is also taking place in Davao, Subic, Iloilo and Bataan. It does seem that while many countries are moving away from “dirty” fuel (like coal) toward clean or “green” energy, the Philippines is going in the opposite direction.

On Nov. 5, GN Power Ltd., a joint venture between Filipino and American investors, is set to start the testing and commissioning of a 600-MW coal-fired power facility in Bataan. Full commercial operations is scheduled in early 2013. In Sarangani, a P19-billion, 200-MW coal-fed plant is also rising, and a 100-MW facility, also using coal, will be built in Zamboanga—both owned by partnerships led by the Alcantara family.

In Subic, Redondo Peninsula Energy Inc., a venture among Aboitiz Power Corp., Manila Electric Co. and Taiwan Cogeneration Corp., will put up a 600-MW coal-fed plant. Another coal-fired facility, with a 300-MW capacity, will be built by Korea Electric Power Corp. to supply the power needs of the Korean-owned Hanjin Heavy Industries, the biggest locator in the economic zone.

Ayala-led AC Energy Holdings Inc. and A. Brown Inc. are spending P12.5 billion to put up a 135-MW coal-fired power plant in Iloilo. Commercial operations are targeted to start in 2015.

In Negros Occidental, Cadiz City Mayor Patrick Escalante is fully supporting coal-fired power plants in his area, saying two firms have proposed to reclaim 50 hectares near the Cadiz port to serve as a site for a 100-MW facility and as an economic zone.

The rush to build several of these facilities—which proponents insist are cheaper and faster to put up—followed the warning from outgoing Energy Secretary Jose Rene Almendras of a major power shortage by 2015 if no new baseload plants would be built.

But why coal? The ill-effects of this “dirty” fuel have been chronicled here and abroad. Take the case of the 600-MW Masinloc coal-fired plant in Zambales. Pushed to its completion in 1998 although everyone seemed to be against it, the harmful effects of the plant’s operation became evident several years later, affecting mostly farmers and fishermen, complained Masinloc Mayor Desiree Edora. “The fruits of trees, specially mango trees for which we are well known for, have been stunted. They do not grow as big as before. Fishermen report less catch,” Edora lamented, adding that aside from the ash that fell on the town, the power plant discharged its waste materials directly to Oyon Bay.

Before the Masinloc plant was acquired by the US-based AES Corp. from Napocor in 2008, an Asian Development Bank report had pointed out that “the operating performance of the plant has declined since 2001 because of inadequate maintenance and insufficient capital investments. The plant’s operations have been characterized by low capacity, poor availability, low reliability, and violations of environmental, health and safety conditions. The plant’s emissions are unable to meet dust emission limits at any load.”

Proponents of coal-fired power facilities reason out that new technologies now lessen the plants’ harmful impact on the environment and that the renewable energy option is too costly. However, Pete Maniego, chair of the National Renewable Energy Board, points out that the proposed feed-in tariff (FIT) rates for hydro and biomass power at P6.15 and P7 per kWh, respectively, are already lower than the approved electricity rates for coal plants in 2011. Maniego notes that coal advocates usually emphasize the price advantage of coal, “but that cost advantage does not factor the ill effects of carbon in the atmosphere… hidden costs [that] are not borne by the electricity or transport payer, but by those in the community whose health are affected.”

The Philippine Environment Monitor estimates that, annually, due to air pollution the Philippine economy wastes $1.5 billion and the Philippines spends more than $400 million in direct costs on health expenses. The World Bank says that 5,000 annual premature deaths in Metro Manila may be due to respiratory and cardiovascular diseases from exposure to pollution.

It is difficult to understand how the Aquino administration can push the construction of so many coal-fired power facilities after launching the National Renewable Energy Program, an initiative to lower carbon dioxide emissions.

MANILA, Philippines - A subsidiary of listed Aboitiz Power Corp. (AP) has signed a deal to supply electricity to a Davao-based power distributor.

The new agreement will ensure the security of the power supply in Davao City and neighboring areas, the company said.Under the deal, Therma South Inc. (TSI) will supply 100 megawatts (MW) of additional capacity to Davao Light and Power Co., Mindanao’s largest distribution utility.Therma South is spending $546 million for a 300-MW coal-fired power plant in Southern Mindanao be completed in June 2015.“We have the advantage of having already started our construction and we will ensure that we will build a world-class power plant that the people of Mindanao will be proud of,” said Therma South chief operating officer Benjamin A. Cariaso Jr.“The combination of rapid economic growth in the Davao Light franchise area and the expected deteriorating supply from the National Power Corp. require us to act responsibly and secure this power now and ensure the power needs of Dabawenyos in the future,” Davao Light EVP and chief operating officer Arturo M. Milan said.Milan said Davao Light will make sure that power delivery in the city is unhampered.Davao Light has an estimated peak demand of 290 MW, serving more than 300,000 customers in the cities of Davao and Panabo as well as neighboring municipalities of Carmen, Dujali and Sto. Tomas.The power supply deal will be submitted for approval by the Energy Regulatory Commission (ERC).To date, the Mindanao grid still suffers from around four hours of rotating brownouts given a shortage of 190-300 MW.“Mindanao is facing a critical power shortage and it will only get worse as our demand for power is increasing. TSI will deliver much needed power by 2015,” Cariaso said.AP is investing P35 billion to add 354 MW to the Mindanao grid, 54 MW of which will come from the run-of-river hydro plants of Hedcor Inc., and 300 MW from the clean coal facilities of Therma South Inc.It owns and operates the 747-MW Tiwi-Makban geothermal plants in Albay, two 100-MW bunker fired power barges, the 105-MW Ambuklao hydroelectric plant in Benguet and the 100-MW Binga hydroelectric plant in Benguet.AP is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services.source

MANILA, Philippines - The National Grid Corp. of the Philippines (NGCP) is seeking regulatory approval for higher allowable revenues next year.In a regulatory filing, the transmission service provider applied for P44.977 billion in allowable revenue (MAR) for next year.“We applied for P44.98 billion. The approved MAR for 2012 is at P40.35 billion. Hopefully it will be approved by the ERC,” said Agnes dela Cruz, head of Tariff, Design and Wheeling Management Division of NGCP.Dela Cruz said the proposal for higher revenues was driven by the use of the 2006-based consumer price index.Billing determinant like demand for electricity and increased use of the transmission lines was also taken into consideration.For instance, Dela Cruz said the six-percent demand growth in franchise areas of Manila Electric Co. (Meralco) required a three-percent increase in NGCP services.“The transmission customers in Luzon, Visayas and Mindanao will be billed based on their respective power delivery service rates,” NGCP said.Specifically, the company aims to collect as much as P33.625 billion by servicing Luzon, P5.348 billion in Visayas and P6 billion in Mindanao.NGCP is also seeking approval to collect P642.08 million under the Performance Incentive Scheme (PIS).The NGCP recovers its investments through fixed rates added to consumers’ electricity bills. If approved, the rates will be in effect starting January next year.“The proposed MAR and PIS were designed and developed in accordance with the provisions of the Rules for Setting Transmission Wheeling Rates and other pertinent issuances of [the ERC],” NGCP said.“The issuance of a provisional authority will allow NGCP to timely implement its capital expenditure programs and cover its operation and maintenance expenditures for calendar year 2013,” NGCP said.“Also, the timely implementation of the rate translation of the MAR will reduce, it not eliminate, the risk of under recovery, which is substantial to NGCP,” it added.NGCP is a private firm in charge of operating, maintaining, and developing the country’s power grid and electricity superhighways.The NGCP allotted roughly P100 billion in capital spending for the creation of new transmission lines and substations, and the expansion of existing facilities nationwide in the next 10 years.The Transmission Development Plan targets improving power transmission nationwide through the installation of new system reinforcements, development of alternative transmission corridors, prevention of heavy loading and upgrade of existing facilities for the NGCP to be the strongest power grid in Southeast Asia. source

MANILA, Philippines - Manila Electric Co. (Meralco) has increased the refund it is claiming from double charges of the Power Sector Assets and Liabilities Management Corp. (PSALM).The country’s largest power distributor is already seeking P10 billion in refunds, higher than the P9.1 billion it filed last July the power sector regulator said.“Meralco updated the calculation. It is not P9.1 billion but some other figure,” said Energy Regulatory Commission (ERC) executive director Francis Saturnino Juan.Juan said “more or less” the refund is already in the P10-billion range already.Specifically, Meralco submitted the summary of transition supply contract line loss computation and supporting official receipts covering July 2006 to May 2012.In March 2010, ERC ruled that there was double charging in transmission line costs for TSC quantities during the start of operations of the Wholesale Electricity Spot Market (WESM) in Luzon.State-run PSALM, for its part, earlier said it is still reviewing the claim of Meralco.“Nothing in the past has prevented PSALM for filing its calculation but as far as I know, no exact figure was given by PSALM so we will leave that to the ERC,” Juan said.Juan said ERC will also decide how to settle the pending issue.ERC had required PSALM, WESM administrator Philippine Electricity Market Corp. and Meralco to submit supporting documents.“Hopefully, the case will be included already in the agenda for deliberation in one of the commission meeting set on November and a decision will already be reached by then,” Juan said.The refund is seen to benefit customers of the country’s largest power distributor.Consolidated customer accounts of Meralco, rose 3.7 percent to a record 5.11 million as of end-June as the company added 88,391 new customers from the start of the year.PSALM, formed by the 2001 Electric Power Industry Reform Act, is the state firm in charge of privatizing government power assets as well as managing National Power Corp.’s power plants and debt. source

Davao Light and Power Co., the largest electricity distributor in Mindanao, signed a 100-megawatt power supply agreement with Therma South Inc. to secure power supply in Davao City and neighboring areas.

The agreement commits 100 MW to Davao Light once the construction of the 300-MW clean coal power plant of Therma South in Davao City is completed by June 2015. Both Davao Light and Therma South are controlled by Aboitiz Power Corp., one of the country’s largest power companies.

“We are happy to have earned the confidence of Davao Light and we will do our best to build and deliver our power plant as scheduled. The people of Davao have welcomed our investment and it is just right that they reap the benefits of the power that we will produce,” Therma South chief operating officer Benjamin Cariaso Jr. said.

Davao Light has an estimated peak demand of 290 MW, serving over 300,000 customers in the cities of Davao and Panabo as well as the neighboring towns of Carmen, Dujali and Sto. Tomas.

“We have the advantage of having already started our construction and we will ensure that we will build a world-class power plant that the people of Mindanao will be proud of,” Cariaso said.

“The combination of rapid economic growth in the Davao Light franchise area and the expected deteriorating supply from the National Power Corp. require us to act responsibly and secure this power now and ensure the power needs of Dabawenyos in the future,” Davao Light executive vice president and chief operating officer Arturo Milan said.

“This unprecedented economic growth in Davao City needs electric power and we in Davao Light will do our best that this power is delivered reliably and the progress of our city goes unhampered,” he said.

Cariaso said Mindanao was facing a critical power shortage and the situation could only get worse as the region’s power demand increased. “TSI will deliver much-needed power by 2015,” Cariaso said.

Milan and Aboitiz Power vice president for sales and marketing Roland Gaerlan signed the deal on Oct. 25.

The two companies will submit the power supply contract to the Energy Regulatory Commission for approval.

Therma South is using the latest circulating fluidized-bed technology to ensure power plant operations meet stringent government environment emission standards.

Another subsidiary, Hedcor, is also maximizing renewable energy sources on hydropower plants with a combined capacity of 11.6 MW being constructed in Davao del Sur. Several other projects are in the pipeline to bring the total additional renewable energy capacity to 54 MW by 2015.source